Thousands more Tamil civilians were fleeing the rapidly diminishing sliver of rebel-held land in north-east Sri Lanka today as government troops continued their mission to capture the Tamil Tiger leader Velupillai Prabhakaran.

As aid agencies warned of a catastrophic humanitarian crisis, with hundreds of civilians killed or wounded, the head of the Sri Lankan army, Lieutenant General Sarath Fonseka, told the BBC that troops knew the "general area" where Prabhakaran was based and that "action would be taken to destroy him". The general said only 300-400 Tamil Tiger fighters remained, but there could be 700 "forcibly armed" people in rebel bunkers.

Two senior rebels surrendered to advancing troops earlier this week, the military announced today. The Tamil Tigers' former media spokesman, Velayuthan Thayanithi, and an interpreter for the insurgents' political wing turned themselves in with their families today.

Both men played prominent roles during failed peace talks mediated by Norway, and Thayanithi is the most senior rebel official to surrender so far, the army said.

Unicef said today it faced a "human avalanche" of destitute people in Sri Lanka as the military entered an established no-fire zone and freed 3,000 civilians trapped between the army and rebels.

The United Nations confirmed the huge numbers of fleeing people. "It is 60,000 plus and counting, and we have heard various reports of up to 110,000 coming out," said a UN spokesman in Colombo, Gordon Weiss. He cautioned that the reports were preliminary and not confirmed.

So far, only 7,500 had reached refugee centres away from the front in Jaffna and Vavuniya towns, while the rest were in transit, he said.

The UN children's agency has raised concerns that the overcrowded ­internment camps to which civilians had been taken would be unable to cope with the influx of tens of thousands of people fleeing the fighting. Sarah Crowe, of Unicef, said it was facing a "human avalanche" and described the situation as being "on a knife edge".

Last night the International Committee of the Red Cross said it was worried about civilians still trapped in the zone. "The situation is nothing short of catastrophic. Ongoing fighting has killed or wounded hundreds of civilians who have only minimal access to medical care," said the director of operations Pierre Kraehenbuehl. "What we are seeing is intense fighting in a very small area overcrowded with civilians who have fled there."

The ministry of defence website claimed that fighters of the Liberation Tigers of Tamil Eelam (LTEE) had fired at civilians attempting to cross the no-fire zone, while the rebels said 1,000 ­civilians died in a government raid on their territory, which the military said freed thousands of non-combatants from the war zone. The military denied the accusation.

Neither report could be confirmed because independent reporters are banned from entering the area.

A Médecins Sans Frontières team working at a ministry of health hospital in Vavuniya, near the no-fire zone, reported it had received more than 400 war wounded in the last 36 hours with ­surgeons working in "chaotic" conditions.

Seevaratnam Puleedevan, the secretary general of the Tamil Tiger peace secretariat, urged the international community to intervene to force a permanent ceasefire, a move Sri Lanka has ruled out.

Puleedevan said he was near the ­border of the no-fire zone and confirmed that Prabhakaran was inside the zone. "He is with us and he is directing the war against the Sri Lankan armed forces and providing a lot of support and assistance to the people," Puleedevan said.

Human rights groups say the LTTE is holding many people against their will to use as human shields. But those groups have also accused the government of indiscriminate shelling against civilians. Both sides deny the allegations against them.

The UN estimated that more than 4,500 civilians have been killed in the last three months, and several humanitarian groups warned yesterday that any government efforts to launch an assault into the rebel area would result in a dramatic increase in casualties.

The number of fleeing ­civilians made it clear that the government had vastly underestimated how many people were caught in the fighting. While aid groups had estimated that about 100,000 civilians were trapped before this week's exodus, the government had said the figure was about 40,000.

Meanwhile, Mahinda Rajapaksa, the Sri Lankan president, rejected the latest call by Gordon Brown for a pause in fighting, his office said yesterday. It said in a statement that Rajapaksa deemed a pause "unnecessary" considering the "unexpected exodus of civilians", when the two leaders spoke by telephone on Monday.